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Centrelink Car Loan Eligibility, plus 5 tips to prepare for finance application

Centrelink Car Loan Eligibility.

If you receive a Centrelink Pension or are on New Start or Youth Allowance that is coupled with a Pension, it is possible for you to be approved for car finance! Now, the eligibility varies slightly depending on what kind of payments you receive, so read the relevant section to you below!

Centrelink Pension Car Loan Eligibility:

Centrelink Pension Types:

  • Single Parent Pension
  • Partnered Parent Pension
  • Family Tax Pension
  • Aged Pension
  • Disability Pension
  • Carers Pension

If you are on a Centrelink Pension (or combination of any of the payments above), and receive $800 or more per fortnight (before expenses) you are eligible for a car loan of up to $8,000. The loan term is capped at 3 years so repayments are generally around $95 per week.

Newstart or Youth Allowance Car Loan Eligibility:

If your sole income is Newstart and Youth Allowance alone, this will not meet eligible criteria by any lenders. This is due to Newstart and Youth Allowance being a form of unemployment and is not a stable income, that meet their minimum income guidelines.

However, the good news is, if you also receive an additional payment type (like family tax or a casual job) you may be eligible for car finance! Your other income however needs to generate $800 or more per fortnight and your employment needs to have been 12 weeks or longer.

How to Apply for a Centrelink Car Loan

If you think you are eligible, apply now, it is really easy. Just type in all your basic info and submit it.

Then it will take you to the second page where it will ask you to upload:

  1. Privacy form (to give us permission to submit your app)
  2. Last 3 months of bank statements
  3. Centrelink Income Statement
  4. Last 2 payslips (If working)

Before applying, have a read of our tips to help you get approved for car finance!

5 tips and solutions to prepare for a car finance application.

1. Minimise ATM cash withdrawals and excessive gambling:

As mentioned above, stop withdrawing cash for savings straight away. Lenders can now easily calculate the percentage of income being withdrawn at ATMs and lenders often view cash withdrawals as gambling, even if you are just putting it aside as savings!

How else can you put money aside to save?

Rather than withdrawing cash to budget or save, open a separate bank account and limit access, e.g. Do not activate a Debit card for the account. Online banking and immediate transfers between accounts makes it simple to create multiple accounts for a variety of uses. As an example, have a ‘rainy day fund’ for savings or an ‘everyday’ account for general living expenses. This shows lenders your capacity to manage your everyday expenses, savings and existing commitments, whilst also accounting for all income in your bank accounts.

2. Prevent dishonours on bank statements and financial commitments

When applying for additional finance, it is important to show good repayment history with lenders on existing financial commitments. Consistent dishonours on your bank statements shows lenders an inability to manage your funds effectively.

But what if dishonours are out of your control?

Sometimes these dishonours are out of your control and most lenders are aware of this; so, if you find yourself in a situation where you could miss a payment, it is always best to contact the lender prior to the drawing date and attempt to organise a resolution. Credit assessors would prefer to see clients organise ‘make up’ payments rather than dishonour and avoid the problem, burying their heads in the sand!

3. Avoid using payday loans for everyday expenses

Payday loans are a quick and easy solution for finance; however, they end up hurting borrowers with high interest and large ongoing repayments. Payday loans may be a viable option for unexpected emergencies or unforeseen financial situations, but they will have an adverse effect on your credit rating and chances at finance for the future.

But what if you don’t have enough money available for my commitments?

If you are struggling financially with your ongoing commitments, look into the possibility of obtaining a consolidation loan to manage your repayments and get on top of your financial situation.

Lenders will look unfavourably at the use of payday loans to facilitate general living expenses and could mean the difference between declining and approving your application.

4. Avoid high volume of bank transfers

Some borrowers prefer to siphon funds from different accounts on a daily basis for existing repayments and general living expenses. Not only does this behaviour run the risk of dishonouring on financial commitments, but also makes it difficult for lenders to track your bank statement activity. The easier it is for lenders to evaluate the inflow and outflow of income and expenses, the faster they can reach an assessment decision.

How should you manage your bank accounts?

Try and keep your bank statement activity as clear and concise as possible so lenders can reach a decision without any degree of ambiguity. Simply put, try keep your money in the one account as much as possible.

5. If you are uncertain about your chances of finance, ask for advice!

If you have any questions about your borrowing capacity or how your application might look to a potential lender, it is always best to consult a broker! Simply put in your application online and we will pre access it before sending it to the lenders.

Our team of Brokers at Unicorn Auto will help to find you a potential lender that will assist with your funding requirements or give you advice that will improve your financial application for the future. We will even give you free financial coaching with regular reminders emailed to you to help keep you on track!

Get Car Finance Today with Unicorn Auto

If you are needing car finance, simply fill in our Finance Application form online today! Or if you have any questions, contact us today.

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